Chutzpah: Why Craig can’t save classifieds
In an open letter to craigslist, Steve Outing asks its founders and operators to help save the newspaper industry from itself. My response:
Steve,
It takes real chutzpah to ask Craig Newmark and Jim Buckmaster of craigslist to help newspapers salvage their classifieds businesses and thus save democracy, or at least the part of it that newspapers presumably foster.
Your clever open letter to them, at the same time congratulating and blaming, misplaces responsibility. It assumes they have the authority to solve a problem that the news industry inflicted upon itself: how to replace a subsidy predicated on controlling and authoritarian business practices.
Steve, I can’t decide if your modest proposal is naive, self-serving or tragically poetic.
Craig Newmark never set out to disrupt the newspaper industry. Motivated only by helping people out, he created a simple list for his friends, initially distributed through email, and later on the Internet when one friend showed him how to create a Web page. Their trust in him, as well as a passion for serving others through technology, gave craigslist its authority.
You miss the magic of craigslist. It is Craig’s “friends” — a community that has grown to 40 million people a month in 500 U.S. cities and 50 countries (larger than all news sites combined by several factors) — who disrupted newspaper classifieds. Call them users, customers, an audience, a market, or marketplace, they discovered that through craigslist they could do for themselves what others charged excessively in order to handsomely subsidize their businesses.
Trust in Craig, still craigslist’s chief customer service representative, remains at the heart of it. So are democratic, open markets: the right of the people to conduct commerce and journalism among and between themselves.
Meantime, newspapers charged premium prices for access to an arcane classification system that published a few, annotated lines of shorthand in very small type at the back of a dense product with limited, daily distribution. The hard-to-find, hard-to-read, one-way advertisements were distributed to parts of a relatively small geographic region for sellers and buyers to discover, at least those who happened to buy the newspaper and read the classifieds section on the very day they were prepared to make a transaction.
For a lousy experience, newspapers in growth markets such as Dallas, Denver and San Jose made hundreds of millions of dollars that drove margins of 30 per cent or more with these high-yield liners.
The experience was not significantly improved by importing this business to the online version of the newspaper. What didn’t work in print didn’t work online.
Newspapers used their profits not to expand their social mission, but rather to drive the stock price of the companies that owned them, to finance acquisitions, to reward management, and to acquire additional wealth through cost-management: death by acquisition accelerated by cutting their way to profitability.
Financing news operations has never been much a part of it; ask any editor who has asked for budget increases or additional staff to cover a society growing increasingly complex and competitive. The moral imperative is a myth perpetuated by editors and journalists, not by the publishers you (Steve) are asking Craig and Jim to help.
Now, other forms and systems – a collaborative, more democratic Fifth Estate, if you will — are emerging to replace an institution that is broken. Almost anyone can deploy the simple technology that craiglist uses. Anyone can participate in its journalism and commerce.
Publishers would be better served by implementing enlightened business strategies with a passionate consumer connection at its core. Until then, they will continue to be cast in a survival drama of their own making.
Newspapers are like a broken satellite falling of orbit. The technology is failing; the mission may soon be scuttled. To stay in orbit, the engineers must repair and update the technology systems. More importantly, the flight controllers must restore trust in the mission and its results by relinquishing control. Otherwise, Satellite Newspaper – classifieds and all — will burn up in the atmosphere.
Craig Newmark and Jim Buckmaster may be talented astronauts, but they shouldn’t go down with the pilots of their competitors’ obsolete ships.
